Trenton faces $4 million shortfall in revenues to make budget for fiscal year 2014, officials said

Trenton Budget Officer Elana Chan speaks at a city department directors meeting in the Mayor's Conference Room at City Hall on Thursday, September 6, 2012. Martin Griff / The Times of Trenton.

TRENTON — The city is facing a $4 million shortfall in revenues needed to make budget in the next fiscal year, which starts in July, the city budget officer told city council members at a meeting tonight.

Elana Chan, the city budget officer, said the preliminary budget projections for the fiscal year 2014 budget, show that the city will need to increase the city’s tax rate by about 6 percent to close the budget gap. The projections estimate that the city will need to raise $4.1 million more in the municipal tax levy next year, which would increase the city’s tax rate by 23 cents, Chan said.

Chan stressed that these are only projections and do not reflect the final budget and tax rate.

“We haven’t closed the books yet,” Chan said.

Chan requested that the city council approve a temporary budget for the first quarter of fiscal 2014 as well as an estimated tax levy for the second half of 2013 that includes a 2 percent increase.

Chan said the budget gap assumes that the city will see a $3.8 million reduction in transitional aid from the state.

Transitional aid is designed to help ease the sting from the loss of regular infusions of Capital City Aid Trenton received up until 2010. Transitional aid comes in steadily declining amounts.

Chan said she is assuming a 15 percent decrease in transitional aid, which is equivalent to the decrease the city saw in 2013’s transitional aid.

Chan said most of the city budget, about 67 percent, is spent on personnel costs, so it may be difficult for the council members to find places to cut.

“What can we cut?” Chan said. “Really it’s not a lot without looking at staff.”

Chan said because staff levels are already so low in most city departments, it would be difficult to lay off more personnel.

“Every department is so strapped for staff as it is,” she said.

Council members decided not to take an immediate vote this week on the entire temporary fiscal 2014 budget. Some funding will be provided to allow the city to continue functioning, but some departmental funds will be withheld so that council can take a close look at the proposed spending for those sections.

Council members said they have not had an opportunity to meet with all the department heads to discuss spending and wanted to wait until all departments can have a budget meeting.